HUD Distributes Section 3 FAQs Based on Final Rule

A new set of Section 3 Frequently Asked Questions (FAQs) based on the new final Section 3 regulations effective November 30, 2020 (see Memo, 10/5/20) was posted on the Section 3 webpage of HUD’s Office of Field Management and Policy (FMP). That Section 3 webpage, which will look familiar to Section 3 advocates, was transferred to FMP from the Office of Fair Housing and Equal Opportunity (FHEO) which oversaw Section 3 prior to the new final rule. The FAQs, dated March 25, 2021, mostly repackage key provisions of the final rule.

Two FAQs—FAQ6 and FAQ 3—that do not simply repeat the final rule are worth pointing out. 

Under the heading “Recipient Responsibilities,” FAQ6 (page 16) suggests Section 3 recipients (public housing agencies (PHAs) and local and state governments directly receiving Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) funds, among other HUD funds) hire a Section 3 coordinator or assign one individual the responsibility of coordinating all Section 3 activities. NLIHC agrees that this is a good idea but reminds residents and advocates that there is no Congressional appropriation to help implement Section 3. FAQ6 also recommends Section 3 recipient agencies establish procedures to certify Section 3 workers and businesses, maintain a list of eligible workers and businesses by skill, capacity, or interest, and to contact these workers and businesses periodically when employment or contracting opportunities arise.

Under the heading “Numerical Benchmarks,” FAQ 3 (page 21) clarifies that the benchmark requirements do not only count toward new hires. If someone is currently on staff and qualifies as a Section 3 resident under the previous regulations, they will need to re-certify as either a Section 3 worker or a Targeted Section 3 worker under the new regulations.

The purpose of Section 3 of the Housing and Urban Development Act of 1968 is to ensure that when HUD funds are used to assist housing and community development projects, “to the greatest extent feasible,” preference for some of the jobs, training, and contracting opportunities that are created go to low-income people, “particularly those who are recipients of government assistance for housing.” Another Section 3 obligation is to support businesses owned or controlled by low-income people or businesses that hire them. Public housing agencies (PHAs) and jurisdictions using Community Development Block Grant (CDBG), HOME Investment Partnerships program, and other HUD funds, must comply with Section 3 and ensure that contractors and subcontractors comply.

NLIHC has a “Detailed Summary and Analysis of the Final Section 3 Regulations” and a “Brief Summary and Analysis of the Final Section 3 Regulations.” The former has regulation citations, quotes from the preamble to the final rule, as well as more detailed information. The latter is a more streamlined version.

HUD’s March 25, 2021 Section 3 FAQs are at:

NLIHC’s “Detailed Summary and Analysis of the Final Section 3 Regulations” is at:

NLIHC’s “Brief Summary and Analysis of the Final Section 3 Regulations” is at:

The Federal Register version of the final Section 3 rule is at:

An easier-to-read version of the final rule is at: